How a Shrinking Federal Student Aid Staff Will Impact Your Financial Aid
Credit: Jemal Countess / Stringer / Getty Images Entertainment- About 10% of the Federal Student Aid (FSA) workforce has accepted buyouts.
- Experts worry this will cause disruptions in students getting their financial aid money and suggest students fill out their FAFSA forms as soon as they can.
- The Trump administration has pushed for dismantling the Department of Education, and FSA is reportedly expecting more reductions soon.
An internal list shows that about 10% of the Federal Student Aid (FSA) workforce — which oversees student loans — has accepted buyouts to leave their positions. Fewer workers processing financial aid might mean disruptions and delays to students getting their money.
USA Today reported that 124 FSA office workers enrolled in the “deferred resignation program.” In 2024, roughly 1,444 FSA employees administered the distributions of financial aid like scholarships, grants, and loans.
The departing employees reportedly include workers in the borrower defense division, ombudsman’s office, and information technology, as well as budget professionals. The buyouts come as the Trump administration looks to reduce the size of the government — warning of “large-scale” reductions at federal agencies.
Experts are concerned that experienced federal employees leaving the Department of Education (ED) would have negative ramifications for students, especially when it comes to students applying for loans and grants to go to college. The FSA manages a nearly $2 trillion federal student loan portfolio.
Elon Musk’s Department of Government Efficiency reportedly floated the idea of artificial intelligence (AI) helping students with their Free Application for Federal Student Aid (FAFSA) forms and financial aid questions, which student success experts warn would short students on valuable assistance.
Bloomberg Law reported that FSA executives are preparing for further reductions to their workforce. Student aid experts say students should file their FAFSA as soon as possible to get ahead of the curve.
Recent data on FAFSA submissions shows some students and their parents and guardians are doing just that.
The National College Attainment Network (NCAN) estimates, as of Feb. 14, that 33% of the class of 2025 has completed their FAFSA forms. That’s an increase of 6.4% compared to this time in 2024 and 13% compared to this time in 2023.
How Can Students Get Ahead of Financial Aid Disruptions?
In a conversation with BestColleges, Karen McCarthy, vice president of public policy and federal relations with the National Association of Student Financial Aid Administrators (NASFAA), warned of potential disruptions to student aid if the FSA workforce were to diminish.
McCarthy said NASFAA is concerned about the impacts of federal employees resigning or being laid off, as this might impact or disrupt the flow and distribution of financial aid to students if there are fewer staff members at ED or FSA. She said programs need funding and human resources to be carried out successfully.
McCarthy said students don’t have to do anything different regarding aid this year than previous years. She recommends students still fill out their FAFSA forms and fill them out early. As further staff reductions start to unfold, she also suggests students check in with their financial aid offices.
However, McCarthy cautions students not to panic about the Trump administration’s desire to disband ED or over the status of their federal financial aid.
“It is not the time to panic,” McCarthy said. “There is no current threat to the existence of these federal aid programs or the current funding for those aid programs.”
She reminds students that because federal aid resources like the Pell Grant are established by Congress, it would be “legally impossible” for an executive order to end them.
Additionally, she said that abolishing federal aid has no support in Congress nor has the presidential administration alluded to this, so it is not likely to go away.